Low-paid restaurant and cafe staff will lose some of their penalty rates for working on Sundays after a long-awaited decision by the industrial tribunal.

The decision means that the loading for working on Sundays will drop from 75 per cent to 50 per cent for some casual workers from July.

The restaurant and catering industries immediately lauded the changes, estimating that businesses would save $112 million each year.

The decision was made by the Fair Work Commission, though two members of the commission issued a strongly worded dissenting judgment.

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According to the majority judgment, paying workers higher penalty rates on Sundays "may have a limited effect on employment".

This means that the commission accepted that some cafes and restaurants would be more likely to hire staff if wages were lowered.

But the majority judgment also rejected the argument by the restaurant and catering industry that, for casual workers, working on Sundays was no different to working on Saturdays.

"Working on Sundays involves a loss of a day of family time and personal interaction upon which special emphasis is placed by Australian society,’’ the judgment said.

The decision applies only to the two lowest grades of employees in a restaurant, bar, or cafe.

In their dissenting opinion, commission vice-president Graeme Watson and commissioner Michael Roberts said the Sunday loading for the lowest paid casual workers should reduce by only 20 per cent, staged until January 2015.

Restaurant & Catering Australia chief executive John Hart said that some businesses, now shut on Sundays, could consider reopening.

“This will provide labour cost relief for restaurant and café operators currently trading on Sundays,’’ Mr Hart said of the decision.

The restaurant industry is arguing for deeper cuts to penalty rates.

Mr Hart said the decision would affect between 30,000 and 40,000 workers across the country.

Mr Hart also said that the decision represented the first time the commission had accepted that higher penalty rates could lead to lower employment.

"That's a really important part of what this decision has found," Mr Hart said.

"That link has never been acknowledged before."

United Voice, the union representing cafe and restaurant workers, said it would resist any further cuts.

Acting national secretary of United Voice, David O'Byrne, that the decision risked creating an underclass of lower-paid workers.

"The real concern for us is the treatment of casuals at the lower end of the classification structure," Mr O'Byrne said.

He said that food and beverage attendants classified as grades one or two were often new to the industry, more vulnerable than experienced workers, and often women.

As a result of the decision, these employees will receive a lower loading on Sundays than employees on higher grades.

"We think people should be treated the same, or with equality," Mr O'Byrne said.

97 comments

Great, can't wait to see cafe's pass the savings on to customers with lower prices . . . I won't hold my breath.

Commenter

zecc

Location

Southbank

Date and time

May 15, 2014, 10:20AM

They simply won't be satisfied until everyone is on $10 an hour

Commenter

Jay

Location

Melbourne

Date and time

May 15, 2014, 10:20AM

To be fair, not everyone. They will be happy with 99.9% of us on $10/hr and 0.1% on 7 and 8 figure salaries.

Commenter

Olaf

Location

Date and time

May 15, 2014, 10:37AM

Way to go with the scare-mongering, Jay.

Why do you not understand that there is no justification to pay employees so much more if they work on Sundays compared to when they work on Mondays? They aren't more productive. The business doesn't charge their customers more. Why should these employees be paid more?

Commenter

Simon

Location

Melbourne

Date and time

May 15, 2014, 10:59AM

$10 per hour???!! You lazy lot will just blow all that on cigarettes, going to the pub and playing the pokies. $2 per day is the rate that is required to keep our nation competitive with the other mining nations in Africa.

Commenter

Gina knows best

Location

Date and time

May 15, 2014, 11:18AM

I gather you think that the casual work force should be entitled to close down a business on a Sunday because the owner can't afford the wages? Or that people should be denied being able to go to their favourite eatery because it's closed for the day?

They are exactly what they are called "penalty" rates. Why penalise a business owner simply for opening on a Sunday? If you want higher paid work go and find it. The rates being paid were absurd and obscene and just another part of the entitlement mentality.

Commenter

housemartin

Location

hong kong

Date and time

May 15, 2014, 11:55AM

@Housemartin - if the business owner wants to stay open on a Sunday then it should be profitable for everyone... not just the owner - hospitality workers have to in general jump through hoops to run to work at the very last minute because 'owners' are too tight to always have a roster, so we compromise our lives all the time for close to a minimum wage...

The key to being profitable business is its quality, not the fact that it 'thinks' it pay too much to its staff on a Sunday - if that's the case, I'd suggest the owner find a new line of business...

If you want the finer things in life Housemartin then I suggest you pay for it... otherwise... learn to cook at home!!

Commenter

The boy who cried wolf

Location

Planet Earth

Date and time

May 15, 2014, 12:44PM

Simon, its because a Saturday and a Sunday are non-working days. They are days for family time. Working on those days cuts into that family time therefore those workers should be compensated accordingly. I can't believe you don't know that. Their wages should not have been cut. I will no longer go for a coffee if I happen to be out shopping on a Sunday just to spite this ruling.

Commenter

Country Carole

Location

Melbourne

Date and time

May 15, 2014, 12:56PM

Why can't you just accept it? If everyone is on large salaries, ALL the prices are high up and nobody is better off, as you pay about same proportion of your salary for goods and services.Most of the prices in Australia are so high because of high property costs (rental) and high labor cost. It will actually be better for the country to have lower salaries. Yes, some will be on much higher, but they will be either high-skilled or running a company. And I do not have a problem with that. After all, if someone brings in profit of $10mil, they can have $1mil salary.

Rudolf

Commenter

Rudolf

Location

Date and time

May 15, 2014, 1:43PM

Housemartin, if the business owner doesn't want to pay penalty rates, then he can open a M-F, 9-5 business.